Gold ends below $1,670, logs minor weekly loss

Platinum may be poised for further outperformance: strategists

WilliamL. Watts

SAN FRANCISCO (MarketWatch) — Gold futures fell below $1,670 an ounce Friday to end the week modestly lower, as strength in the dollar and a rise in U.S. equities helped lure investors away from the precious metal.

Strategists said platinum may be poised to further outperform gold.

Gold for April delivery
US:GCJ3
shed $4.40, or 0.3%, to settle at $1,666.90 an ounce on the Comex division of the New York Mercantile Exchange. It hadn’t closed below $1,670 since Jan. 31, and it stayed in a tight trading range of less than $9 on Friday.

For the week, prices finished 0.2% lower.

March silver
US:SIH3
settled at $31.44 an ounce, up 4 cents, or 0.1%. For the week, it was down 1.6%.

“Trade deficit numbers shrunk for the U.S., indicating positive signs for the U.S. economy,” so equities rallied and “tail-risk commodities such as gold suffered,” said Jason Rotman, president at Lido Isle Advisors in Newport Beach, Calif. “We expect gold’s next $30 dollar move to be to the downside.”

“Gold has major resistance at the $1,690 level, and has not been able to stay above that level recently,” he said. “With the S&P 500
SPX, -1.42%
having an easy time staying above 1,500, we believe investors will continue to move into equities and away from gold and bonds.” See: U.S. stocks get China lift.

U.S. stocks climbed Friday following strong trade data from China and the U.S. The monthly trade deficit in the U.S. fell almost 21% in December to its lowest level in two years, according to the Commerce Department. See: U.S. trade deficit sinks.

In China, January data showed exports jumped 25% and imports climbed 28.8% from the year-ago period, giving the country a trade surplus of $29.2 billion. All three figures beat market expectations.

Thursday’s currency gyrations meant that while gold fell back in dollar terms, it rose in euros to a two-week high of almost €1,260 an ounce for a time, strategists at Commerzbank led by Eugen Weinberg wrote in a note.

Platinum premium

The Commerzbank analysts also seized on platinum’s continuing strength relative to gold, which saw platinum futures hit their widest premium versus gold since August 2011. “Given the concerns about further production losses in South Africa, we expect platinum to continue its advance and maintain its lead over gold,” they said.

Strategists at Credit Suisse agreed.

“Technical momentum seems to have bottomed, but investment interest remains lackluster. We think the more cyclical platinum market has better prospects than gold,” Credit Suisse analysts wrote in a note.

April platinum futures
US:PLJ3
fell $7.60, or 0.4%, to end at $1,714.70 an ounce, but they were still 1.6% higher than a week ago.

In other metals trading, palladium futures
US:PAH3
added $1.05, or 0.1%, to $751.50 an ounce. They lost nearly 0.7% on the week.

High-grade copper futures
HGH3, +0.00%
rose 3 cents, or 0.9%, to $3.76 a pound, down 0.7% for the week.

Intraday Data provided by SIX Financial Information and subject to terms of use. Historical and current end-of-day data provided by SIX Financial Information. All quotes are in local exchange time. Real-time last sale data for U.S. stock quotes reflect trades reported through Nasdaq only. Intraday data delayed at least 15 minutes or per exchange requirements.